While the government plans to revive the gold mines, employees expressed concerns at the government’s ability to flush capital into the venture.

Kolar Gold MinesShyamal/Wikimedia Commons
news Mining Thursday, December 10, 2020 - 17:22

On the heels of the Union government’s proposal to revive Bharat Gold Mines Ltd (BGML) in Karnataka’s Kolar, the company’s former employees have expressed disappointment that the decision was taken without consulting them. The employees, who have formed the BGM All Employees Industrial Cooperative Society (BGMAEICS), have been waiting for compensation due to layoffs and the subsequent closure of the company 20 years ago. BGML’s employees also said that the government’s decision to revive BGML amounts to contempt of court as the Supreme Court had in 2013 said that the mines should be revived and the operations handed over to BGMAEICS.

Though the employees said that they welcomed the Union government’s move, they also expressed apprehension whether the government would be able to invest adequate capital to optimise mining operations in Kolar Gold Fields (KGF).

In 2009, the Karnataka High Court had issued an order asking the Union government to revive the gold mines. At that time, the HC had asked the Ministry of Mines to submit documents inviting global tenders to invest in the mines, whose lease would be handed over to BGMAEICS. However, the HC had stipulated that the quotations can be sent only by companies with experience in gold mining and not by ordinary mining companies. But in 2013 when the Union government called for global tenders, two Australian companies and a Canadian company were shortlisted. Eventually, the Union government decided not to issue tenders to any of the shortlisted companies, stating that they lacked technical and financial stability to maintain and operate the gold mines in Kolar.

Read: Kolar gold mines to be revived after nearly 2 decades, but how feasible is mining?

In 2013, when the Union government had appealed against the Karnataka HC’s decision to revive the gold mines, the apex court too had upheld the HC’s judgement and further said that the Union government has to work out a deal with the employees – to either pay compensation for the layoffs or transfer the mining lease to the BGMAEICS. After talks were held, the government decided to transfer the mining lease.

“The government is not handing over mining rights to us. If they want to revive it, they have to pay compensation to employees, which they have not done in 20 years. This is contempt of court,” said KM Divakaran, President of BGMAEICS.

The issue of transfer of mining lease

This changed in 2015, when the Mines and Mineral Development and Regulation (MMRD) Act was amended. Under this amendment, when the lease of a mining company expires and if said company has not applied for renewal, the mining lease would be auctioned. After BGML had shut down operations in 2001, BGMAEICS applied for a transfer of mining lease in 2006, before the amendment was brought in. However, the Union government rejected the cooperative’s request, stating that the lease had to be auctioned, thereby delaying the revival of the mines. In 2016, another amendment was made to the MMRD Act, which now allowed transfer of mining lease to a third party, if it is a captive mine, like the one in KGF.

“Even after the amendment was brought in, we submitted requests to transfer the lease. We wanted to bring in investment to revive the mines as a lot of work has to be done and it’s capital intensive. Now the government is saying it will revive BGML. We’re happy with this decision but what about our compensation? The deal was to either hand over the mining lease or give compensation,” said Divakaran.

He said that compensation has not been given to 3,100 former employees, supervisors and officers of BGML, which in 2001 had amounted to Rs 52 crore. “We want compensation with interest. The government has dragged this issue for two decades and many people lost their jobs and livelihoods because of this decision. My grandfather, father and I have worked in the mines in Kolar. I know what it’s like here,” he said.

What goes into reviving KGF mines

Speaking to TNM, a former engineer with BGML said that the one-time capital to begin the process of reviving the mines would amount to at least Rs 500 crore. With the mines being closed for a long time, water has accumulated in many shafts.

“We have to dewater the whole thing. The gold processing mill, which will process the gold from the ore, must be installed. In Kolar, there is 40 million tonnes of crushed ore in which there is residual gold. This must be extracted,” he said.

The engineer further stated that the government would have to invest in infrastructure like Carbon in pulp (CIP), a technique which involves gold extraction during the processing procedure. He said that new low profile hauling dumpers, mining winders or lifts, underground locomotives, air-conditioning of shafts, heavy hydraulic machines, ball mill crushers for the ore, and heavy duty submersible pumps are required to begin operations.

“The mines are 1-2 km deep. We need 60 mining winders or lifts. The laser technology will not help here as the gold strains are available but in smaller quantities. Earlier, we could produce 3 gm of gold from 1 ton of ore. Now we can produce 1.5 gm of gold from 1 ton of ore. This does not mean it’s not profitable,” the BGML engineer said, while adding that the difference lies in the gold prices. Earlier, BGML made Rs 1,200 for 3 gm of gold and now they can make up to Rs 7,500 for 1.5 gm of gold.

He further stated that the Mineral Extraction Corporation Ltd, while submitting its feasibility report, had suggested using laser technology. Divakaran, who has previously worked in BGML, said that this would not be effective.

“Laser technology cannot penetrate and melt gold. The costs would be exorbitant. It may be effective for other minerals but not for gold, as the strains are present in very small amounts. It has to be crushed and processed. What the government needs to invest in is infrastructure and equipment,” he added.

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